Debunking another popular myth
Apr. 13th, 2005 08:58 am![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
windelinaPaul Krugman's latest deals with healthcare:
Those of us who accuse the administration of inventing a Social Security crisis are often accused, in return, of do-nothingism, of refusing to face up to the nation's problems. I plead not guilty: America does face a real crisis -- but it's in health care, not Social Security.
Well-informed business executives agree. A recent survey of chief financial officers at major corporations found that 65 percent regard immediate action on health care costs as "very important." Only 31 percent said the same about Social Security reform.
But serious health care reform isn't on the table, and in the current political climate it probably can't be. You see, the health care crisis is ideologically inconvenient.
Let's start with some basic facts about health care.
Notice that I said "health care reform," not "Medicare reform." The rising cost of Medicare may loom large in political discussion, because it's a government program (and because it's often, wrongly, lumped together with Social Security by the crisis-mongers), but this isn't a story of runaway government spending. The costs of Medicare and of private health plans are both rising much faster than gross domestic product per capita, and at about the same rate per enrollee.
So what we're really facing is rapidly rising spending on health care generally, not just the part of health care currently paid for by taxpayers.
Rising health care spending isn't primarily the result of medical price inflation. It's primarily a response to innovation: The range of things that medicine can do keeps increasing. For example, Medicare recently started paying for implanted cardiac devices in many patients with heart trouble, now that research has shown them to be highly effective. This is good news, not bad.
So what's the problem? Why not welcome medical progress, and consider its costs money well spent? There are three answers.
First, America's traditional private health insurance system, in which workers get coverage through their employers, is unraveling. The Kaiser Family Foundation estimates that in 2004 there were at least 5 million fewer jobs with health insurance than in 2001. And health care costs have become a major burden on those businesses that continue to provide insurance coverage: General Motors now spends about $1,500 on health care for every car it produces.
Second, rising Medicare spending may be a sign of progress, but it still must be paid for -- and right now few politicians are willing to talk about the tax increases that will be needed if the program is to make medical advances available to all older Americans.
Finally, the U.S. health care system is wildly inefficient. Americans tend to believe that we have the best health care system in the world. (I've encountered members of the journalistic elite who flatly refuse to believe that France ranks much better on most measures of health care quality than the United States.) But it isn't true. We spend far more per person on health care than any other country -- 75 percent more than Canada or France -- yet rank near the bottom among industrial countries in indicators from life expectancy to infant mortality.
This last point is, in a way, good news. In the long run, medical progress may force us to make a harsh choice: If we don't want to become a society in which the rich get life-saving medical treatment and the rest of us don't, we'll have to pay much higher taxes. The vast waste in our current system means, however, that effective reform could both improve quality and cut costs, postponing the day of reckoning.
To get effective reform, however, we'll need to shed some preconceptions -- in particular, the ideologically driven belief that government is always the problem and market competition is always the solution.
The fact is that in health care, the private sector is often bloated and bureaucratic, while some government agencies -- notably the Veterans Administration system -- are lean and efficient. In health care, competition and personal choice can and do lead to higher costs and lower quality. The United States has the most privatized, competitive health system in the advanced world; it also has by far the highest costs, and close to the worst results.
Over the next few weeks I'll back up these assertions, and talk about what a workable health care reform might look like, if we can get ideology out of the way.
***************************
Hunh. Well, I've known that the US has terrible infant mortality rates for an industrialized country.
I guess we're discovering yet another area where we're not "#1".
Those of us who accuse the administration of inventing a Social Security crisis are often accused, in return, of do-nothingism, of refusing to face up to the nation's problems. I plead not guilty: America does face a real crisis -- but it's in health care, not Social Security.
Well-informed business executives agree. A recent survey of chief financial officers at major corporations found that 65 percent regard immediate action on health care costs as "very important." Only 31 percent said the same about Social Security reform.
But serious health care reform isn't on the table, and in the current political climate it probably can't be. You see, the health care crisis is ideologically inconvenient.
Let's start with some basic facts about health care.
Notice that I said "health care reform," not "Medicare reform." The rising cost of Medicare may loom large in political discussion, because it's a government program (and because it's often, wrongly, lumped together with Social Security by the crisis-mongers), but this isn't a story of runaway government spending. The costs of Medicare and of private health plans are both rising much faster than gross domestic product per capita, and at about the same rate per enrollee.
So what we're really facing is rapidly rising spending on health care generally, not just the part of health care currently paid for by taxpayers.
Rising health care spending isn't primarily the result of medical price inflation. It's primarily a response to innovation: The range of things that medicine can do keeps increasing. For example, Medicare recently started paying for implanted cardiac devices in many patients with heart trouble, now that research has shown them to be highly effective. This is good news, not bad.
So what's the problem? Why not welcome medical progress, and consider its costs money well spent? There are three answers.
First, America's traditional private health insurance system, in which workers get coverage through their employers, is unraveling. The Kaiser Family Foundation estimates that in 2004 there were at least 5 million fewer jobs with health insurance than in 2001. And health care costs have become a major burden on those businesses that continue to provide insurance coverage: General Motors now spends about $1,500 on health care for every car it produces.
Second, rising Medicare spending may be a sign of progress, but it still must be paid for -- and right now few politicians are willing to talk about the tax increases that will be needed if the program is to make medical advances available to all older Americans.
Finally, the U.S. health care system is wildly inefficient. Americans tend to believe that we have the best health care system in the world. (I've encountered members of the journalistic elite who flatly refuse to believe that France ranks much better on most measures of health care quality than the United States.) But it isn't true. We spend far more per person on health care than any other country -- 75 percent more than Canada or France -- yet rank near the bottom among industrial countries in indicators from life expectancy to infant mortality.
This last point is, in a way, good news. In the long run, medical progress may force us to make a harsh choice: If we don't want to become a society in which the rich get life-saving medical treatment and the rest of us don't, we'll have to pay much higher taxes. The vast waste in our current system means, however, that effective reform could both improve quality and cut costs, postponing the day of reckoning.
To get effective reform, however, we'll need to shed some preconceptions -- in particular, the ideologically driven belief that government is always the problem and market competition is always the solution.
The fact is that in health care, the private sector is often bloated and bureaucratic, while some government agencies -- notably the Veterans Administration system -- are lean and efficient. In health care, competition and personal choice can and do lead to higher costs and lower quality. The United States has the most privatized, competitive health system in the advanced world; it also has by far the highest costs, and close to the worst results.
Over the next few weeks I'll back up these assertions, and talk about what a workable health care reform might look like, if we can get ideology out of the way.
***************************
Hunh. Well, I've known that the US has terrible infant mortality rates for an industrialized country.
I guess we're discovering yet another area where we're not "#1".
![[identity profile]](https://www.dreamwidth.org/img/silk/identity/openid.png){kind=small}
no subject
Date: 2005-04-13 04:39 pm (UTC)Seriously, the health care system is pretty badly screwed up, and I think a lot of it is because most health insurance isn't really health insurance, it's more like prepaid care. So people tend to go running to the doctor for every sore throat and sniffle, which drives up the cost...and there's no good way to comparison shop between doctors and clinics, at least not yet, which is another thing that drives up costs. Don't even get me started on Medicare.
One thing I notice he doesn't mention about the VA: a lot of the efficiency he touts has come from the current administration closing down a lot of VA hospitals (many of which were providing horrible care) and having a lot of veterans dealt with on an outpatient basis or through home health care.
no subject
Date: 2005-04-13 05:24 pm (UTC)The sad thing, is that we have to charge patient's outside insurance plans and charge higher co-payments because of the budget issues.....
no subject
Date: 2005-04-13 07:37 pm (UTC)I realize I'm hearing it from the patient's point of view and I know there are good VA hospitals. There also seem to be some pretty terrible ones, though. This likely stems from the budget cuts. I find it funny that the author touts the efficiency of the VA, but it looks like efficiency for some is achieved by forsaking care for many others.
no subject
Date: 2005-04-13 08:20 pm (UTC)no subject
Date: 2005-04-14 12:52 am (UTC)no subject
Date: 2005-04-14 12:48 pm (UTC)no subject
Date: 2005-04-15 12:20 am (UTC)no subject
Date: 2005-04-15 12:51 pm (UTC)